Bitcoin traders have identified the ‘inflection point’ as a key future market indicator as BTC breakouts
Analysts say the Bitcoin (BTC) market is at an “inflection point” after the historic Bitcoin 2024 conference, which saw demand for BTC futures break out of range.
“We finally have a divergence in this range,” said independent analyst Horse, referring to open interest in Bitcoin futures.
Open Interest (OI) refers to the total number of BTC related contracts currently open on all exchanges.
An increase in this measure indicates that investors are opening new positions in the derivative market. Generally, when new contracts are created, the overall leverage in the market increases, so an increase in OIA can result in greater volatility for the asset.
Independent market analyst Horse has shared the following chart showing that Bitcoin OI on Coinbase Pro has broken above its new all-time high since March.
The rally was fueled by a shift in US politics to pro-crypto narratives, with Bitcoin OI rising along with its value.
Horse quoted former US President Donald Trump's comments at the Bitcoin 2024 conference in Nashville on July 27, saying the sector has been handed everything on a silver platter.
“Whether or not they actually come to fruition is debatable, but right now you have an obligation to be long-term bullish on this asset class either way.”
Horse noted that Bitcoin prices were trading higher following Trump's speech, with long bets being closed in both the futures and options markets. “This is a shame,” he said.
“Hot misses are poorer than r:r base. If you go out alone it definitely supports shorts or at least a fence, which is pretty stupid but worth noting. This is because the decline is very close, i.e. hedge 69+, close to highs.
Fellow analyst Skew shared similar sentiments, saying the overall bitcoin futures market is “clearly long.”
RELATED: Bitcoin Pushes to $70K – Only 6% Needed for New All-Time High
Skew added that to break the price down to $72,000, “permanent buying” would be needed, which would cover the risks that are currently missing.
“However, if spot buying stops for a while, the direct risk of forced long leverage reduction becomes very clear (which often ends up being a quick wick in a market bid). The market is moving.
As predicted by Skew, Bitcoin price fell away from $70,000 to trade at $67,271, according to data from Cointelegraph Markets Pro and TradingView. This resulted in the loss of more than $55.66 million in long BTC leveraged positions in the last 24 hours, with $46.74 million flowing in the last 4 hours alone.
However, with Bitcoin futures OI reaching an all-time high of over $39.4 billion, the price of BTC may soon climb to new all-time highs, making the ongoing correction likely to be short-lived.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
